CO-OP Financial Services Blog: Insight Vault

According to former smart USA president and future  THINK ’10 conference speaker Dave Schembri, one of the best ways for credit unions to connect with their communities, build member loyalty and attract new members is to engage in charitable activity.

“One of the most effective ways of marketing is ‘discovery marketing,’ when consumers learn about you in a natural way, not through conventional advertising,” says Dave. “One of the best ways that potential members can discover your credit union is through charitable partnerships. Consumers today are looking for products and services providers that show civic mindedness. When they see that a company is not only putting its own money into a charity, but its employees are also putting their own time and money into it, they know that civic mindedness is genuine.”

Dave, who will be speaking on “Street Smart” at THINK ’10 this April, knows this well as a 30 year veteran of the car industry, and a member of the Board of Directors of the Boomer Esiason Foundation, which raises research funds to find a cure for cystic fibrosis.

In 1996, the credit union industry established the Credit Unions for Kids initiative to partner with the Children’s Miracle Network and raise funds for children’s hospitals throughout the country.

There are few better ways for you to uplift your communities than by holding a Credit Unions for Kids fundraiser. The dollars your credit union raises can be designated for a hospital directly in your area. What’s even better, there is a way to add on to what you raise.

CO-OP Financial Services, on behalf of its member credit unions, offers the CO-OP Miracle Match program. In 2009, the CO-OP Miracle Match program provided $1 million in matching funds to fundraisers supporting Children’s Miracle Network.

If your credit union is considering a Credit Unions for Kids event in 2010, we encourage you to go to our CO-OP Miracle Match Web page immediately and complete an application.

From the perspective of CO-OP Financial Services, we are incredibly impressed with the generosity of the credit union movement. There can be no doubting the sincerely of the civic mindedness of credit unions and their employees. We’ve also been impressed with their creativity.

One activity from 2009 was the “Shirt Off Our Backs Jersey Auction with the River City Rascals” conducted in August by 1st Financial FCU of St. Charles, Mo. 1st Financial FCU is a sponsor of the River City Rascals, a minor league baseball team in the St. Louis metropolitan area. Following the Rascals’ last game of the season, they auctioned off the players’ jerseys. The auction raised $4,000 and CO-OP Miracle Match produced $4,000 more for a grand total of $8,000 for the Children’s Miracle Network.

According to 1st Financial’s Michelle Rosner, “It was a natural fit for our two organizations to come together for this great cause. The River City Rascals are an economical alternative to high-cost sports in the area, and we are an economical alternative to high-cost banking!”

What have you got planned for 2010?  Please let us all know by leaving a comment – we hope your great idea will lead to the discovery of many others!

As a movement, we have much to be proud of as we look back on 2009. In spite of a difficult year, we lived up to our mission of uplifting communities. As we look ahead to 2010, we may have another difficult year ahead of us characterized by slower organic loan growth, increases in loan delinquencies and losses, downward pressure on net income and falling net worth ratios.

In spite of these issues, I believe we have three outstanding opportunities before us to:

• Boost fee income
• Contain costs
• Increase relevance

Boosting fee income can include increasing payments as a source of non-interest income; adding membership by reaching out to new demographics; retaining and cross-selling existing member relationships through superior service; capitalizing on interchange; evaluating your networks for operational efficiencies and access and convenience for your members; and investing in analytics and portfolio optimization so that you can influence card members’ behavior, boosting card usage and interchange income.

After a year in which Congress was distracted by the economy and health care, it can truly be said of interchange that the future is now. It is not clear how or if interchange rates will change, but CO-OP Financial Services encourages all institutions to continue supporting organizations such as the Electronic Payments Coalition (EPC) to protect fair interchange income for credit unions.

Cost containment can be found in enhancing fraud loss prevention measures through greater data security, improved controls and card reissuance, all of which will build cardholder confidence and increased usage. Secondly, contain costs by protecting your relationships with your existing members. Focusing on member service, such as 7×24 call center support, will reduce costly member turnover.

Credit unions also have an unprecedented opportunity to increase relevance. Compete head to head with every large financial institution in your field of membership.  Find the most appropriate trends for credit union relevance.  For instance, many banks are turning their backs on small business customers. This provides a source for members and is a great business opportunity. Finally, provide products and services that are innovative, promote a bigger geographic footprint and access ubiquity and cost efficiency, all with an eye for membership stickiness and retention.

The advantages of credit unions over banks as primary financial institutions has never been more compelling, or more widely reported by personal finance gurus and columnists. Among these have been Suze Orman (here), Liz Pullman Weston of MSN Money (here), Gerri Willis of CNN (here), Vera Gibbons of CBS News (here) and Bob Trebilcock of CBS MoneyWatch.com (here).

These three opportunities constitute a stand out and stay ahead strategy for the credit union industry in 2010 and beyond.

CO-OP Financial Services exists to serve its client credit unions and the movement as a whole. This incorporates a wide variety of products and services facilitate convenient access to accounts for credit union members.

We have also sought to help the movement as a source of strategic advice. This is why we host our annual THINK conference, provide dozens of training Webinars and, of course, offer our nationwide network of National Relationship Managers to help you.

This is also why we are unveiling Insight Vault, a weekly blog that we have added to our Web site. Each week, thought leaders and subject matter experts within CO-OP Financial Services will be offering information on issues important to all of us in the credit union industry.

As we establish our blog, we invite your comments on each week’s entry. In this way, we can not only dialogue with you on leading industry issues, but we can make sure that future entries are addressing topics that are the most important to you.

My own hope for this blog is that it will, as already stated, provide you with one more resource to help you operate your credit union more efficiently and profitably. Beyond that, I hope we will grow closer as industry colleagues, get to know each other better; and in this way, better serve the movement to which we are equally dedicated.

Let me – and our other authors – hear from you regularly.